Swiss bankers reject offshore haven status

Niklaus Blattner, chief executive of the Swiss Bankers Association Keystone

The chief executive of the Swiss Bankers Association says Switzerland is not an unregulated paradise for criminals and tax fraudsters.

This content was published on June 6, 2000

However, at a press briefing in London, Niklaus Blattner said that Switzerland was an offshore centre in the sense that it was a major sophisticated financial centre.

"We are not so naive to ignore the fact that the term offshore centre also has negative connotations - a place where free-riding, sun-tanned characters spend the day on beaches of virgin white sand sipping long drinks under palm tress while their funds of dubious origin dry untaxed in a local bank" he said.

He was referring to offshore centres:
· where money launderers could exploit the absence of effective financial supervision
· where there were often low or no tax rates for non-residents, impenetrable banking secrecy laws and a general refusal to co-operate with foreign authorities

"Many people think of Switzerland as a classic example of such an offshore centre. They are wrong!" he said.

"We certainly can't offer much in the way of palm trees and virgin beaches. However, I would be the first to admit that Switzerland is an "offshore centre" in the sense that it successfully offers banking and asset management services to an international clientele," he added.

Blattner referred to a recent report of the Financial Stability Forum created by the G7 countries which considered the implications of offshore financial centres for global financial stability.

"We were happy to read that Switzerland is not perceived as posing a threat to global financial stability...Switzerland was classified in the top category of the list in terms of regulatory standards of all offshore centres identified," he said.

Referring to attempts by the European Union to harmonise national tax legislation, Blattner said that the Swiss system of a withholding tax could serve as a model.

"For many years, Switzerland has imposed the highest withholding tax in the world - 35 per cent - to encourage taxpayers to honestly declare their savings and bond income to the tax authorities," he said.

The tax is refunded when the tax authorities are satisfied that a complete and accurate declaration has been made.

Guidelines proposed by the European Commission aim to compel EU member states either to report interest payments made to private individuals resident within the EU to the tax authorities, or to levy a withholding tax.

For obvious reasons, the Commission would also like to see countries outside the EU, including Switzerland adopt these proposals.

However, because of Swiss bank customer confidentiality laws, the reporting obligation is out of the question.

"The Swiss government recently made clear that it is hoping progress will be made in the EU and that it is not in principle against any form of co-operation," Blattner said.


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